Fact Sheet 124
CREDIT FREEZE and FRAUD ALERTS

This guide covers:

• Fraud Alerts- what are they?
• Credit Freezes – what are they and how to get one
• States that have Credit Freeze Laws and the rules that apply to them
• Sample Letter Form to request a freeze  

FRAUD ALERTS:   There are two processes you can use to help protect your credit.   The least invasive is a “fraud or security alert.” This is a consumer statement added to your credit report asking issuers to check with you prior to issuing credit.   Unfortunately, at this time, while there is a law that requires issuers to honor this request, some credit issuers do not obey the law.   Other credit issuers don’t use credit reports so they do not see the fraud alert.   We find fraud alerts work about 70% of the time.   The placement of a fraud alert is free.   It lasts for 90 days unless you are a victim of identity theft and have submitted a police report to extend it to seven years.   There are also companies that can assist you with the fraud alert.   (see ITRC-Debix message)

FREEZES:    All states now have credit freeze programs, but not all programs are the same. They vary from state to state, depending on the laws that state has passed, or if the freeze is being offered by the three Credit Reporting Agencies. Please see our State and Local Resource Map for your states freeze law.  Potential creditors, insurance companies, landlords and some employers doing financial background checks may be told that your report is unavailable for viewing.

Each time you wish to qualify for a loan, credit card, tenancy or a job, you may need to “thaw” the report.   This takes about 3 days.   It may interfere with a rapid need for your report.   This is an important consideration to keep in mind.   However, it will also stop thieves from opening accounts.   You can ask the business which credit agency they use and just thaw that one agency’s report.   If they don’t know, you will need to thaw all 3 reports.   Reports can be thawed for a period of time or for a specific company to see.   Neither of these processes will affect your credit score but both will prevent you from getting “instant” credit.   That is the trade-off for higher levels of information security.

In ITRC’s opinion a freeze is the best form of financial identity theft protection currently available, but it is by no means a guarantee of safety.

For example, companies can, and will, issue credit without looking at a report.   However, you have a very strong argument as to the fraudulent nature of that account.   Also, a credit freeze will not stop or fix an ongoing identity theft.   However, for many of us, the freeze not only brings peace of mind but gives us some measure of control to our financial security, especially with an unstoppable identity thief in your life.

Companies that will be able to view your report even with a freeze include:

1. Ones that you already have an existing business relationship with or a collection agency acting on behalf of the existing account, for purposes of reviewing (account maintenance, monitoring, credit line increases, and account upgrades and enhancements) or collecting the account.
    
2. A consumer’s information may be used for the purposes of prescreening as provided for by the federal Fair Credit Reporting Act, even if a security freeze is on the report.

Cost:   Some states are allowing the credit reporting agencies to charge victims, some are not.   Remember- you need to freeze the reports with all three of the credit reporting agencies to be completely effective.

FOR AN UPDATED LIST OF STATES WITH CREDIT FREEZES:
http://www.consumersunion.org/campaigns/learn_more/003484indiv.html

Copyright January 2007, Identity Theft Resource Center®, all rights reserved.

Created by the ITRC
The information in this publication is the property of ITRC and not available for promotional purposes.     Any requests to reproduce this material, other than by individual victims for their own use, should be directed to ITRC.